Where we sit in the Premier Business League

[Charly]

Is this right? £300 million in debt?

I thought one of the stipulations when the Americans bought the club was that they weren't allowed to saddle the club with loans they used to buy the club?

Didn't they form a separate company because of this - Kop Holdings or something and the loans were secured against their own assets, not the clubs?

No, they are a couple of lying cunts. The loan is with Kop holdings, whos only asset is LFC. LFC are bearing the entire cost of the interest. They have done exactly what they said they wouldnt. They transferred the loans from themselves to LFC, in all but name.

[Guest]

Debt isn't a problem if they can be serviced adequately. Man Utd for example, have enough revenue to cover interest repayments of their debts, whilst our revenue still isn't sufficient enough to do that.

That is also why they have more spending power than us and have been outbidding us in every transfer market season.

Nouveau riches such as Man City and Chelsea are clubs threading on very thin line. They must be successful in the short term if not they run the risk of going bankrupt.

[Charly]

Debt isn't a problem if they can be serviced adequately. Man Utd for example, have enough revenue to cover interest repayments of their debts, whilst our revenue still isn't sufficient enough to do that.
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You are quite wrong about that. They have made a loss of £45m despite winning the League and Champions league, plus a £21m transfer profit, and full house in every game.

So with no transfer activity, it means a £66m loss every year, unless they can create more revenue, which isnt going to be through ticket sales or TV money, or peize money. That is not sustainable

[Guest]

You are quite wrong about that. They have made a loss of £45m despite winning the League and Champions league, plus a £21m transfer profit, and full house in every game.

So with no transfer activity, it means a £66m loss every year, unless they can create more revenue, which isnt going to be through ticket sales or TV money, or peize money. That is not sustainable

Why did you add the £21m to the £45m? If they made a 'profit' on transfers, surely that would have to be deducted or was it implied in the £45m?

I'm very circumspect about accounting figures as it's very easy to induce people in errors by bandying figures around. I wouldn't think for one moment that these clubs don't know what they're doing. We get a lot of revenues via sponsorship deals and other streams, likewise for Man Utd, so I'm pretty confident that we're both 'sustainable' in the long run.

That's why also the building of our stadium is crucial. Basically the business will have to sustain itself plus provide the manager with adequate funds (which in the current climate other clubs have an advantage) to buy players every season.

[Red_Polo]

He's assuming they won't have a £21m transfer profit in future years.

[Charly]

He's assuming they won't have a £21m transfer profit in future years.

Yeah, basically.

Accounting should be really easy, but is made difficult so very rich people can play the system, and to keep accountants in jobs. In some cases, making a loss isnt a bad thing, as it has tax implications, but I dont think this is a case of either set of Yanks playing some sort of game, or creative accounting. I think they are genuinely in the ****.